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Here's why 'Shark Tank' star says small banks won't be around in 24 months
4:05
CNN
Here's why 'Shark Tank' star says small banks won't be around in 24 months
4:05
Wall Street heavyweight JPMorgan Chase reported record sales, with Citigroup, Wells Fargo, BlackRock and PNC Financial also reporting strong first-quarter earnings. They’re the first bank earnings reports since Silicon Valley Bank and Signature Bank failed last month.
The latest retail sales data came in weaker than expected , a potential sign that the economy is taking a turn for the worse. Investors will also get a look at consumer sentiment from the University of Michigan survey.
First-quarter earnings for S&P 500 companies kick off this week, and economists are predicting the biggest earnings decline since the onset of the pandemic.
Our live coverage for the day has ended. Follow the latest business news here or read through the updates below.
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BlackRock, the world’s largest asset management firm, slashed Chief Executive Officer Larry Fink’s pay by 30% to $25.2 million for 2022, according to a filing with the Securities and Exchange Commission.
The move comes after the money manager reported first-quarter revenue that was down 10% from a year ago, as rising interest rates and economic uncertainty impacted the firm’s bottom line.
“With respect to 2022 compensation, management determined to reduce the impact of the firm’s decline in profitability on BlackRock’s broader employee population by concentrating the downward adjustments to total incentive awards toward senior management,” the filing said.
Total compensation for Fink, 70, included a base salary of $1.5 million and $23.7 million in total incentive awards. Several other executives saw their compensation reduced, including Rob Kapito, the firm’s president, whose package shrank by 34% to $18.95 million.
UBS’ purchase of Credit Suisse’s US subsidiaries can move forward, the Federal Reserve said Friday.
The statement comes a month after UBS stepped in to rescue the embattled Swiss lender and prevent turmoil in the financial sector from spreading, after an emergency loan of nearly $54 billion from the Swiss National Bank failed to stop the carnage.
The problems for Credit Suisse began when the Saudi National Bank, its largest backer, said it wouldn’t put up more cash after buying a nearly 10% stake in the bank for $1.5 billion in 2022.
Banking customers were already on edge after the collapses of Silicon Valley Bank and Signature Bank — so Credit Suisse shares tumbled more than 25% and saw billions of dollars of outflows.
The global turmoil has led US lawmakers to call for tighter regulations on banks. The Fed board said UBS will provide a quarterly updated plan for combining UBS’s and Credit Suisse’s US business and operations.
“The implementation plan will address UBS’s obligations to comply with more stringent enhanced prudential standards, including liquidity standards,” the Fed said in a statement.
UBS is shelling out 3 billion Swiss francs, or $3.25 billion, for Credit Suisse.
Stocks slid Friday after a slate of earnings beats from big banks fueled concerns that the Federal Reserve will raise interest rates at its next two meetings.
Still, the major indices gained for the week. The Dow rose 400 points, or 1.2%. The S&P 500 gained 0.8% and the Nasdaq Composite advanced 0.3%.
JPMorgan Chase on Friday reported first-quarter profit and revenue that crushed expectations, boosted by the Fed’s interest rate hiking campaign. Citigroup, Wells Fargo and PNC Financial also reported strong results.
CEO Jamie Dimon warned investors in the company’s post-earnings conference call that they should prepare for interest rates to be higher for longer than expected.
Wall Street seems to have taken note. Analysts increased their bets on a quarter-point rate hike at the Fed’s meeting in May and another in June.
Federal Reserve Governor Christopher Waller said Friday that the central bank needs to continue tightening monetary policy, further weighing down markets.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that it’s “definitely” possible the United States enters a mild recession after the tumult in banking last month.
Meanwhile, retail sales data declined more than expected, suggesting that Americans’ spending power and the US economy are weakening.
Consumer sentiment held fairly steady in April, even as concerns about a recession linger, according to the University of Michigan’s latest monthly survey.
“There was too much news to digest this morning, but the key takeaway is that the Fed has room to do more harm,” Edward Moya, senior market analyst at OANDA, said in a note.
The Dow slipped 144 points, or 0.4%.
The S&P 500 tumbled 0.2%.
The Nasdaq Composite sank 0.4%.
As stocks settle after the trading day, levels might still change slightly.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said Friday h…
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